Unicorn companies: The role of communications in shaping strong valuations

Unicorn companies, or startups with valuations in excess of $1 billion, have been crowding media headlines in recent years as their skyrocketing values lead to significant equity events and IPOs. Yet the conversation around what it takes to be a unicorn company — and how to attract the best investors — often misses a critical component: corporate communications strategies.

When you’re building your startup’s brand in the lead up to an equity event or an IPO, shaping the narrative with a clear communications plan lets you build your halo of influence during this critical time. To learn more about industry best practices, we spoke with Investis’ Philip Wisniewski, Vice President, Client Partner. Here’s a closer look at how today’s most successful unicorn companies leverage their communications strategies to help maximize their valuations.

Recognize your audiences

Several critical audiences influence the outcomes of equity events. It’s important to create communications and content that connects with analysts, the press, the financial community and specific investors, as well as potential high-caliber employees. Consider the impact of each audience on your company’s growth, and develop clear, tailored messaging streams to connect with them.

Focus on investors and communicate your vision

In the year leading up to an equity event, you have the opportunity to shape a narrative that attracts the best investors. How does a unicorn communicate its positioning to unicorn hunters?

“Today’s investors want to see a clear road map,” says Wisniewski. “What is your vision? Why are you poised for success? What differentiates your leadership team? What’s your long-term strategy to ensure strong performance?” Develop a road map that clearly answers these questions and use digital-first, dynamic communications to provide regular updates. For example, consider quarterly updates on your investor relations (IR) site so current and prospective investors understand where you’re going and how you’re progressing toward your goal.

Select a partner

Equity events entail a significant workload, whether you’re planning a roadshow or negotiating terms. Don’t let your investor communications strategy fall off the map or receive too little attention. “During equity events, there are a whirlwind of activities between the roadshow and financial structuring,” says Wisniewski. “There is a tremendous amount of work and chaos. And most companies are not prepared, from an IR perspective, to handle that workload. The right partner can offload a tremendous amount of that headache and, in fact, create a platform that can actually position and capitalize the organization rather than missing that opportunity.”

Companies that succeed — either in building strong pre-equity profiles or managing the conversation during their IPOs — select an experienced IR partner who can drive the initiative forward when your core team needs to focus on other things.

Embrace dynamic storytelling

A company’s website — particularly the areas focused on IR — shapes the broader narrative about your team, business and products. Today’s investors aren’t satisfied with static annual reports. They want real-time, digital-first access to the latest information and stories. Unicorn companies are leveraging websites, dedicated investor relations hubs, and social channels to improve communications and make the most of their moment in the spotlight.

“A clear communications strategy is a relatively minimal, incremental investment over all the preparations that you’re going through around this event to play a little bit of an insurance against missing the opportunity to shape the narrative and influence the valuation at the end of the day,” says Wisniewski.

Showcase your corporate social responsibility activities

Investors and consumers increasingly want to do business with organizations that have a greater social mission. Whether social goals are at the core of your company or a significant component of how you do business and manage your supply chain, your IR communications should clearly convey your values. Consider focusing on the following points:

Impact: What impact does your company have in the wider world? How does your company live its CSR values?

Social responsibility efforts: How is your company giving back to the community or investing in the places you work?

Sustainability practices: How do you bring sustainability into the way you do business, from sourcing components to managing your supply chain?

Know the role of data

During an investment conversation, data plays a critical role in communicating your organization’s value and allowing investors to evaluate the opportunity. Data visualization makes financial information easily and quickly digestible for a wide range of audiences.

In any equity event, your company’s management team will be highly incentivized toward success. Developing a clear IR strategy and managing the communications and narrative around the brand is a cornerstone of unicorn companies and their success. To create your road map today, consider partnering with an experienced advisory firm that can ensure your communications stay on target during an exciting and chaotic time.

Liz Alton writes about technology, marketing and business for enterprise audiences. She’s a Forbes contributor and her writing has been published in Inc, USA Today, Entrepreneur, the Huffington Post, Mic, Harvard Business Review blogs and the WSJ. She holds an MBA and a BA in journalism, and is completing a masters in Journalism at Harvard.